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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 1998 (6) TMI AT This

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1998 (6) TMI 261 - AT - Central Excise

Issues:
1. Central excise duty confirmation on Nylon Polyamide Chips
2. Reversal of Modvat credit
3. Penalty imposed on the appellants

Central Excise Duty Confirmation on Nylon Polyamide Chips:
The appeal involved a dispute regarding the central excise duty confirmation on Nylon Polyamide Chips manufactured as an intermediate product. The appellants argued that the chips were made from Nylon Tyre scrap/waste through a recycling process, making them inferior grade and non-marketable. They claimed that the chips were covered under specific notifications providing duty exemption, which had been approved by the Assistant Commissioner. The appellants contended that the duty confirmation was unsustainable due to the non-marketability of the chips and the approved duty exemption. The Tribunal found merit in the appellants' arguments, noting that the chips were entitled to exemption based on the approved classification list. Therefore, the impugned order was set aside, and the matter was remanded for reconsideration to address the duty exemption issue properly.

Reversal of Modvat Credit:
Another issue raised in the appeal was the reversal of Modvat credit taken on inputs used in manufacturing the Fishing Net Yarn. The appellants argued that since the final product was exported, the Modvat credit should not have been reversed. They contended that the export of the final product entitled them to retain the Modvat credit legally. The Tribunal acknowledged the export of the final product and found that a prima facie case had been made for retaining the Modvat credit. Considering the deposits already made and the credit reversed, the Tribunal waived the balance of duty, penalty, and Modvat credit reversal from pre-deposit, staying their recovery. The Tribunal directed the original authority to reconsider the matter, specifically addressing the issue of Modvat credit reversal in light of the export of the final product.

Penalty Imposed on the Appellants:
Additionally, the Commissioner's order imposed a penalty of Rs. 50,000 on the appellants. However, the Tribunal's decision primarily focused on the duty confirmation and Modvat credit reversal issues. The Tribunal did not provide specific details or rulings regarding the penalty imposed on the appellants in the summary of the judgment.

In conclusion, the Appellate Tribunal CEGAT, MADRAS, in the cited judgment, addressed the issues of central excise duty confirmation on Nylon Polyamide Chips and the reversal of Modvat credit. The Tribunal found in favor of the appellants on both issues, setting aside the impugned order and remanding the matter for reconsideration by the original authority. The Tribunal emphasized the entitlement of the chips to duty exemption and the legality of retaining the Modvat credit due to the export of the final product. The judgment did not provide detailed analysis on the penalty imposed on the appellants, focusing primarily on the duty and credit-related aspects of the case.

 

 

 

 

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